Govt Will Sell 96% PSUs To Private Companies; Only 12 PSUs Will Remain Under Govt Control
According to the new policy, the government may reduce the number of public sector enterprises to just around two dozen, compared to the 300 at present.
Less Number Of PSUs
So far, this policy focuses on privatisation in non-core sectors and shutting down the loss making state-run enterprises.
Although, the final number will be decided by the Union cabinet based on recommendations by NITI Aayog as per the Top government sources.
The same was confirmed in the budget mentioning that there will be only four key strategic sectors.
Further, in these key segments, there will be a maximum of three or four public sector units.
Apart from that, all the other areas where PSUs are present, the government will move out and there will be less than two dozen PSUs left.
This will be applicable to banks and insurance companies, especially in the general insurance space.
Minimum Presence Of Public Sector Enterprises In Strategic Sectors
FM Nirmala Sitharman had identified atomic energy, space, defence, transport, telecommunications, power, petroleum, coal and other minerals and banking, insurance and financial services as strategic sectors in her third Budget.
According to the policy, there will be bare minimum presence of the public sector enterprises in the strategic sectors.
Rest all CPSEs in the strategic sector will be either privatised or merged or subsidiaries with other CPSEs or closed.
While in case of non-strategic sectors, CPSEs will be privatised, otherwise shall be closed.
A Big Shift In Government’s Attitude
The policy shows a big shift in the government’s attitude towards privatisation of state-run companies, further flags its commitment to go ahead with the process.
This shows a clear shift to involve the private sector and global investors to bring in efficiency.
Moreover, this will help in providing much needed cash for the government to help revive the economy hit sharply by the Covid-19 pandemic.
Although, this policy comes with its own set of challenges.
According to the senior officer, “It will be easier to set up a new consulting company, and get manpower from some of the PSUs, instead of taking over the entire baggage,”.